Scandinavian Tobacco Group A/S, the Danish company listed on Nasdaq Copenhagen, has reached an agreement in principle with the shareholders of Royal Agio Cigars to acquire a 100% share in the Dutch family-owned business. The proposed acquisition is yet to be submitted for advice to the works councils and for approval by the competition authorities.
The shareholders of Royal Agio Cigars are of the opinion that the intended sale is in the interest of long-term continuity of the activities and the brands of the family-owned business, which was founded in 1904. The combined product portfolio will comprise many successful and highly appreciated global brands. The parties expect to complete the transaction in the first half of 2020.
Royal Agio Cigars, known for cigar brands such as Agio, Balmoral, Panter and Mehari’s, is one of the four largest cigar manufacturers in the world, with net sales of €133 million in 2018. Worldwide, the company employs approximately 3,200 people in its factories in the Netherlands, Belgium, Sri Lanka and the Dominican Republic and its sales organisations in the Benelux, France, Germany, Italy and the United States of America.
Boris Wintermans, CEO of Royal Agio Cigars, said in a statement: “This decision has not been easy. We have a wonderful company with highly committed employees and loyal business partners, some of whom have been working with us for over 50 years. But the combination of the two companies will be in a better position to deal with the financial consequences of ever-increasing legislation and regulations. We carry responsibility for the continuity of Agio and consider our decision to be inevitable in the long term. When the buyer came forward, we began constructive discussions regarding the benefits and resilience the combination of our companies could achieve.”
The Danish Scandinavian Tobacco Group A/S, listed on Nasdaq Copenhagen (previously Copenhagen Stock Exchange) since 2016, is a globally operating manufacturer of cigars, pipe tobacco and fine-cut tobacco. Its portfolio includes over 200 global brands (such as La Paz, Café Crème, Cohiba, Macanudo and W.O. Larsen) and a number of strong local brands. The Group employs 7,650 people, mainly in the Dominican Republic, Honduras, Nicaragua, Indonesia, New Zealand, Australia and the United States of America.
Niels Frederiksen, CEO of Scandinavian Tobacco Group, added: “With its complimentary brands and the perfect fit of its geographical footprint, Royal Agio is a fantastic match with our existing business. I am delighted and proud at the same time that we have taken this important step in the acquisition process. Royal Agio is a company under excellent management with wonderful brands, a strong company culture and a rich history. I look forward to the moment when I can take on leadership of our combined business, which will offer our customers across the globe a highly attractive choice in cigars of the highest quality.”
In the coming period, it will be business as usual in all parts of the company. “We are now focussing on a proper dialogue with the works councils and staff representatives within our company, and of course we are committed to communicating responsibly with our employees,” said Wintermans.
